Lecture Dynamic business law - Chapter 37: Partnerships: termination and limited partnerships

Chapter 37 - Partnerships: termination and limited partnerships. After studying this chapter you will be able to understand: What are the steps in the termination of a partnership? How is a limited partnership formed? What are the rights and privileges of a limited partner and a general partner?

Chapter 37  

Partnerships: 

Termination and  Limited Partnerships

 Formation­­Partnership formed either by written agreement, articles of 

partnership, or by estoppel

 Performance—Business conducted as partners work for benefit of 

partnership, in accordance with partnership agreement

 Dissolution—Partnership dissolves either by act of court, act of partners, 

or operation of law

 Winding Up—Partners complete unfinished partnership business, collect 

and pay debts, collect partnership assets, and take inventory

 Begins when partnership dissolves

 Once partnership dissolved and assets liquidated and 

distributed (“winding up”), partnership terminated

Partnership Dissolution

 Fulfillment of established (agreed­upon) partnership objective

 Expiration of term stated in partnership agreement

 Partner withdraws from “partnership at will” (partnership that does not 

specify objective/duration of partnership)

 Partner withdraws in accordance with partnership agreement

 Partner expelled from partnership in accordance with partnership 

agreement

“Operation of Law”

 Partner dies

 Partner adjudicated bankrupt

 Partnership engages in illegal activity

Action”

partnership agreement

(Definition):

Activity of completing unfinished  partnership business, collecting and paying 

debts, collecting partnership assets, and 

taking inventory

“Winding Up”)

partnership

 Definition:  Agreement between at least one general 

partner and at least one limited partner

 Allows investor (limited partner) to share in profits of  partnership

 Limited partner’s liability limited to amount he/she 

invests in business

Partner)

limited partnership filing requirement

Partners

 General Partner:

 Limited Partner:

Partnership

partnership

partnership

that other general partners will continue operation of business)

liability (dependent on investment he/she makes)